Champion Technology Holdings Ltd reports 29.6% EBITDA decline and 7.5 pp EBITDA Margin decline from 33.1% to 25.6%
18/09/2015 • About Champion Technology Holdings Ltd (
$92) • By InTwits
Champion Technology Holdings Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Champion Technology Holdings Ltd doesn't have a profitable business model yet: FY2015 ROIC is 0.9%
- EBITDA Margin is declining: 25.6% in FY2015 vs. 33.1% in FY2014 vs. 46.0% in FY2011
- Champion Technology Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.3%.
- The company has potentially unprofitable business model: ROIC is at 0.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Champion Technology Holdings Ltd ($92) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 3,125 | 3,411 | 4,453 | 6,159 | 5,610 | -8.9% |
| Gross Profit | 384 | 440 | 548 | 811 | 394 | -51.4% |
| SG&A | | | 233 | 289 | 268 | -7.4% |
| EBITDA | 1,437 | 1,464 | 1,832 | 2,040 | 1,436 | -29.6% |
| Net Income | 57 | 62 | 60 | 2 | 7 | 231.3% |
Balance Sheet
|
|---|
| Cash | 465 | 280 | 331 | 78 | 235 | 200.6% |
| Short Term Debt | 344 | 256 | 232 | 170 | 192 | 12.6% |
| Long Term Debt | 0 | 0 | 17 | 14 | 9 | -39.3% |
Cash flow
|
|---|
| Capex | 16 | 11 | 10 | 10 | 13 | 31.1% |
Ratios
|
|---|
| Revenue growth | 3.8% | 9.1% | 30.5% | 38.3% | -8.9% | |
| EBITDA growth | 11.6% | 1.8% | 25.1% | 11.4% | -29.6% | |
| Gross Margin | 12.3% | 12.9% | 12.3% | 13.2% | 7.0% | -6.1% |
| EBITDA Margin | 46.0% | 42.9% | 41.1% | 33.1% | 25.6% | -7.5% |
| Net Income Margin | 1.8% | 1.8% | 1.3% | 0.0% | 0.1% | 0.1% |
| SG&A, % of revenue | | | 5.2% | 4.7% | 4.8% | 0.1% |
| CAPEX, % of revenue | 0.5% | 0.3% | 0.2% | 0.2% | 0.2% | 0.1% |
| ROIC | 1.7% | 2.2% | 3.0% | 5.2% | 0.9% | -4.2% |
| ROE | 0.8% | 0.8% | 0.8% | 0.0% | 0.1% | 0.1% |
| Net Debt/EBITDA | -0.1x | -0.0x | -0.0x | 0.1x | -0.0x | -0.1x |
Revenue and profitability
The company's Revenue decreased on 8.9% in FY2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 7.5 pp from 33.1% to 25.6% in FY2015.
Gross Margin decreased on 6.1 pp from 13.2% to 7.0% in FY2015. SG&A as a % of Revenue showed almost no change in FY2015.
Net Income marign showed almost no change in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Champion Technology Holdings Ltd had CAPEX/Revenue of 0.23%. The company's CAPEX/Revenue showed almost no change from FY2012 to FY2015. Average CAPEX/Revenue for the last three years was 0.21%.
Return on investment
The company operates at low ROIC (0.94%) and ROE (0.10%). ROIC decreased on 4.2 pp from 5.2% to 0.94% in FY2015. ROE showed almost no change in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.0x and Debt / EBITDA is 0.1x. Net Debt / EBITDA decreased on 0.1x from 0.1x to -0.024x in FY2015. Debt increased on 8.6% in FY2015 while cash surged on 201% in FY2015.
Appendix 1: Peers in Telecommunications
Below you can find Champion Technology Holdings Ltd benchmarking vs. other companies in Telecommunications industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Energine International Holdings Ltd ($1185) | -41.8% | 143.6% | 34.3% | 103.1% | |
| MOBI Development Co Ltd ($947) | -23.4% | -13.8% | 29.1% | 85.6% | |
| Vodatel Networks Holdings Ltd ($8033) | 34.4% | -5.9% | -4.6% | 81.7% | |
| Gold Tat Group International Ltd ($8266) | | 29.4% | 1,582.2% | 77.0% | 26.5% |
| Great World Co Holdings Ltd ($8003) | | 1,651.8% | -81.7% | 61.9% | -3.7% |
| |
|---|
| Median (49 companies) | 8.8% | 9.4% | 7.9% | 6.9% | 20.6% |
|---|
| Champion Technology Holdings Ltd ($92) | | 9.1% | 30.5% | 38.3% | -8.9% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Synertone Communication Corp ($1613) | 65.4% | 68.1% | 64.1% | 70.5% | 50.3% |
| Zhi Cheng Holdings Ltd ($8130) | 61.6% | 45.9% | 41.0% | 64.0% | 19.6% |
| APT Satellite Holdings Ltd ($1045) | 52.3% | 58.7% | 64.1% | 62.5% | |
| Hong Kong Television Network Ltd ($1137) | | -59.6% | -101.3% | 59.7% | |
| Cisco Systems Inc ($4333) | 61.4% | 61.2% | 60.6% | 58.9% | 60.4% |
| |
|---|
| Median (43 companies) | 32.4% | 26.8% | 30.3% | 29.1% | 46.8% |
|---|
| Champion Technology Holdings Ltd ($92) | 12.3% | 12.9% | 12.3% | 13.2% | 7.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Asia Satellite Telecommunications Holdings Ltd ($1135) | 83.5% | 86.5% | 85.8% | 81.6% | |
| APT Satellite Holdings Ltd ($1045) | 76.7% | 81.0% | 78.9% | 77.5% | |
| Synertone Communication Corp ($1613) | 49.5% | 44.9% | 48.5% | 49.4% | 51.5% |
| PCCW Ltd ($8) | 31.4% | 32.0% | 31.9% | 39.2% | |
| China Mobile Ltd ($941) | 47.1% | 43.7% | 38.2% | 36.9% | |
| |
|---|
| Median (49 companies) | 14.2% | 9.9% | 6.7% | 7.9% | -0.4% |
|---|
| Champion Technology Holdings Ltd ($92) | 46.0% | 42.9% | 41.1% | 33.1% | 25.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Hong Kong Television Network Ltd ($1137) | | 12,435.9% | 504.9% | 1,283.5% | |
| Asia Satellite Telecommunications Holdings Ltd ($1135) | 61.8% | 93.8% | 71.7% | 75.0% | |
| Hanny Holdings Ltd ($275) | 80.8% | 19.8% | 11.6% | 28.3% | 0.2% |
| APT Satellite Holdings Ltd ($1045) | 155.2% | 74.3% | 2.5% | 27.2% | |
| China Electronics Corp Holdings Co Ltd ($85) | 1.5% | 1.8% | 8.3% | 27.1% | |
| |
|---|
| Median (49 companies) | 3.4% | 2.9% | 3.9% | 4.7% | 2.1% |
|---|
| Champion Technology Holdings Ltd ($92) | 0.5% | 0.3% | 0.2% | 0.2% | 0.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| VTech Holdings Ltd ($303) | 40.5% | 37.6% | 39.5% | 40.0% | 39.8% |
| Telecom Service One Holdings Ltd ($8145) | | 95.0% | 5.4% | 26.7% | 39.8% |
| TCL Communication Technology Holdings Ltd ($2618) | 6.4% | -1.6% | 6.0% | 17.2% | |
| China Fiber Optic Network System Group Ltd ($3777) | 23.1% | 18.8% | 17.6% | 16.6% | |
| China U-Ton Holdings Ltd ($6168) | 69.5% | 35.7% | 25.0% | 16.2% | |
| |
|---|
| Median (49 companies) | 7.2% | 6.1% | 5.8% | 6.6% | -1.6% |
|---|
| Champion Technology Holdings Ltd ($92) | 1.7% | 2.2% | 3.0% | 5.2% | 0.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| CCT Land Holdings Ltd ($261) | | 10.1x | 23.8x | 48.4x | |
| China Energine International Holdings Ltd ($1185) | | | | 13.3x | |
| China Electronics Corp Holdings Co Ltd ($85) | -2.1x | -2.0x | -1.3x | 12.5x | |
| China All Access Holdings Ltd ($633) | -1.0x | 0.9x | 1.8x | 5.2x | |
| Synertone Communication Corp ($1613) | -0.3x | -0.4x | -2.2x | 4.8x | 2.5x |
| |
|---|
| Median (35 companies) | -0.2x | -0.2x | 0.6x | 0.9x | 0.2x |
|---|
| Champion Technology Holdings Ltd ($92) | -0.1x | -0.0x | -0.0x | 0.1x | -0.0x |
